AWU scandal: Why it matters and what you need to know

IT is the million-dollar union scandal that has haunted Julia Gillard for 17 years, since allegations of wrongdoing were first raised by a Liberal MP in the Victorian Parliament.

According to the Prime Minister, she has done nothing wrong – her only mistake was to be "naïve".

That admitted naivety was in relation to her then boyfriend, Bruce Moreton Wilson – the once mighty Australian Workers Union warrior who was destined for the top – only to fall from grace with a mighty thud.

During a four-year period, Wilson was behind a series of "slush" funds, some of which also involved his loyal sidekick and self-confessed "bagman" Ralph Blewitt.

And while Ms Gillard has admitted that she was naïve, she has consistently and forcefully denied any wrongdoing.

However, the Coalition – and others who have examined this complex case – believe Ms Gillard still has important questions to answer over her role as a senior lawyer with Slater & Gordon and as an adviser to the AWU during one of its darkest chapters.

If it was her boyfriend and others who were up to no good, why is it the PM’s problem?

Judgment and credibility. These are qualities we all want in our political leaders.

The current issues in the AWU scandal raise concerns about the Prime Minister’s judgment and credibility.

Also, her strident denials about what she knew and when are now in question.

On Thursday, former equity partner at Slater & Gordon Nick Styant-Browne alleged that in 1993 Ms Gillard knew about an S&G-funded mortgage for Mr Blewitt on a Kerr St, Fitzroy, Melbourne, property that would be occupied by Mr Wilson.

It would later emerge that the Fitzroy house purchased had also been part paid for with money from a union "slush" fund called the AWU Workplace Reform Association.

Mr Styant-Browne said that in a September 11, 1995 interview with S&G partners, Ms Gillard claimed to have only become aware in August 1995 that the loan came from S&G.

According to Mr Styant-Browne, Ms Gillard "claimed in the interview in 1995 that the first she heard about the Slater & Gordon loan for the acquisition of the Kerr Street property was in about August of 1995".

But he said documents showed there was "absolutely no doubt that Ms Gillard not only knew of the Slater & Gordon mortgage in March of 1993, but was specifically involved in taking steps to facilitate that mortgage".

She had "personally arranged for the mortgage insurance", he said.

On Thursday Mr Styant-Browne told ABC TV’s 7.30 that "it's up to others to make the judgment about her (Ms Gillard’s) credibility".

In response, the Prime Minister again denied any knowledge of the loan prior to August 1995.

A statement from her office said: "Ms Gillard stands by her statements in the Slater and Gordon interview of 11 September 1995 as her best recollection of events two and a half years earlier. There is no contradiction in anything you (7.30) have put to us.

"She did not personally arrange for the mortgage insurance for the Kerr Street property," the statement from the PM’s office said.

Is that the extent of Ms Gillard’s connection to the scandal?

No. Ms Gillard gave legal advice on the establishment of the Australian Workplace Reform Association.

Over a four-year period, from 1991 to 1995, Mr Wilson – aided at times by Mr Blewitt – misappropriated hundreds of thousands of dollars through a series of dodgy union entities linked to secret bank accounts.

During this period, Ms Gillard was involved in a romantic relationship with Mr Wilson and acted as the AWU's legal adviser.

In mid-1992, Ms Gillard gave some advice on the incorporation of the union association, which she later admitted to Slater & Gordon executives was a "slush" fund.

Legal documents filed in the Federal Industrial Relations Commission suggest the Association was used to "launder" around $400,000, with most of the funds coming from West Australian-based construction firms.

Other accounts were also established – in Victoria – which were used to allegedly "launder" union funds with Mr Wilson managing to keep their operation secret until around July 1995, when suspicious AWU officials began gathering evidence against him.

There is no suggestion Ms Gillard knew of the use of the funds.

In August this year, Ms Gillard said: "Once I became aware I had been deceived about a series of matters, I ended my relationship with Mr Wilson."

Were police, or others who were in a position to act, notified in a timely fashion?

The Prime Minister’s critics – and those who continue to probe the 17-year-old scandal – have raised concerns not just about what Ms Gillard did, but what she didn’t, do.

On November 1, during a spirited debate in the Federal Parliament, Ms Gillard was asked by Opposition deputy leader Julie Bishop why she did not report to police the “fraud involving the Australian Workers Union Workplace Reform Association that she helped establish”?

The Prime Minister's response was precise: "By the time the matters she refers to came to my attention, they were already the subject of inquiry and investigation."

But evidence raises questions about whether the authorities were notified in a timely fashion about the alleged fraud.

This raises questions about the when precisely she first knew and what actions she took or failed to take.

On August 23, during her marathon press conference on the AWU scandal, Ms Gillard said the “first time that they came to my attention” was in 1995.

In that interview with Slater & Gordon partners on September 11, 1995, Ms Gillard spoke of her role in providing legal advice to Mr Wilson and Mr Blewitt to help incorporate the Association in 1992.

Union officials have said they did not become aware of the "slush" fund's existence until April 1996.

Did the Prime Minister personally benefit from any union funds?

Like millions of other Australians, Julia Gillard has experienced the ups-and-downs of house renovations.

The Prime Minister has also been subject to allegations that some of the work done on an Abbotsford property she once owned in inner-Melbourne was paid for with union funds.

Bob Smith, who was President of the Victorian Legislative Assembly from 2006 to 2010, recalls being approached by a builder in the mid-1990s who was seeking payment from the AWU for work he claimed was done on Ms Gillard's Abbottsford home. Mr Smith recalls making a phone call to Ms Gillard seeking clarification about the builder's queries.

The PM, in that September 11, 1995, interview with Slater & Gordon partners, admitted to having heard a "rumour" to the effect that a builder had visited the AWU offices seeking payment for renovations.

She told S&G that she had receipts for the work and believed she had paid for all the renovations but said "I can't categorically rule out that something at my house didn't get paid for" out of funds either from the AWU Workplace Reform Association or the union itself.

In August this year, during a press conference on the AWU scandal, Ms Gillard said: "I paid for the renovations on my home" in Abbottsford.

Fresh questions have been raised about PM Julia Gillard's connection to a property bought with stolen funds.

Was Ms Gillard's conduct consistent with what the community would expect of her? Was she honest and open with the firm about her personal relationship with Bruce Wilson?

Ms Gillard has been dogged by allegations that her departure from Slater & Gordon was abrupt and was linked to the work she had done for the Australian Workers Union and her then-boyfriend, Mr Wilson.

While the legal firm maintains close links with its famous ex-partner, a heavily edited transcript of that September 1995 interview between S&G partners and Ms Gillard (which was published by The Australian on August 22 this year) has given the Opposition grounds to raise questions about Ms Gillard's professional behaviour.

It revealed that the legal firm – known for its pioneering work representing victims of corporate greed and malfeasance – had mounted a secret internal inquiry about Ms Gillard's conduct.

On Thursday, Mr Styant-Browne said Ms Gillard had not disclosed her relationship with Mr Wilson. In response, the Prime Minister’s office said her "relationship with Bruce Wilson was not unknown within the firm".

What else has the Prime Minister said in explaining this story?

According to Julia Gillard, she is the victim of “smear” from internet "nut jobs" who have no credibility and no evidence to base their claims.

Apart from a press conference in August, she has refused to answer specific questions put to her by journalists, instead relying on a standard response: "The Prime Minister has dealt with these matters extensively on the public record, and has repeatedly made clear that she was not involved in any wrongdoing.

In the many reports on this matter not one substantiated allegation of wrongdoing has been made."

What should the PM do next?

With the Opposition set to go on full attack mode, the Prime Minister should consider whether it is necessary to make a full statement to the Parliament, setting out her position on the questions and claims.

While it would carry risk for Ms Gillard, it could also answer many of the claims that continue to hound her – and which threaten to damage her chances of re-election when the poll is called next year.

A NOTE ABOUT RELEVANT ADVERTISING: We collect information about the content (including ads) you use across this site and use it to make both advertising and content more relevant to you on our network and other sites.